Medically Unnecessary Upgrade Provided instead of Non-Upgraded Item, No Charge, No ABN
Can’t be used if ABN/HHABN is required, COPs may require notice, recommend documenting records; beneficiary liable
Use only with durable medical equipment (DME) items billed on home health claims (TOBs: 32x, 33x, 34x)
Lines submitted as non-covered and will be denied
Modifier -GY and GZ
GY – Item or service statutorily excluded or does not meet the definition of any Medicare benefit.
GZ – Item or service expected to be denied as not reasonable and necessary.
The GY modifier must be used when physicians, practitioners, or suppliers want to indicate that the item or service is statutorily non-covered or is not a Medicare benefit.
The GY and GZ modifiers should be used with the specific, appropriate HCPCS code when one is available. In cases where there is no specific procedure code to describe services, a “not otherwise classified code” (NOC) must be used with either the GY or GZ modifier.
Claims Processing Instructions
At carrier and DMERC discretion, claims submitted using the GY modifier may be auto-denied. If the GZ and GA modifiers are submitted for the same item or service, treat the item or service as having an invalid modifier and therefore unprocessable.
The Centers for Medicare & Medicaid Services (CMS) has a list of statutorily excluded services or services that Medicare will not reimburse. CMS has established a GY modifier to indicate to secondary and tertiary payers a statutorily excluded service. While Medicare never covers statutorily excluded services, in some instances a secondary payer such as Anthem Blue Cross may cover all or a portion of those services
For services that Medicare does not allow, such as home infusion, providers need only file statutorily excluded services directly to their local plan using the GY modifier and will no longer have to submit to Medicare for consideration. These services must be billed with only statutorily excluded services on the claim and will not be accepted with some lines containing the GY modifier and some lines without.
Effective Oct. 13, 2013:
Providers who render statutorily excluded services should indicate these services by using GY modifier at the service line level of the claim.
Providers will be required to submit only statutorily excluded service lines on a claim (cannot combine with other services like Medicare exhaust services or other Medicare covered services)
The provider’s local plan will not require Medicare EOMB for statutorily excluded services submitted with a GY Modifier.
If providers submit combined line claims (some lines with GY, some without) to their local plan, the provider’s local plan will reject the claims, instructing provider to split the claim and resubmit.
Original Medicare – The GY modifier should be used when service is being rendered to a Medicare primary member for statutorily excluded service and the member has Blue secondary coverage. The value in the SBR01 field should not be “P” to denote primary.
The GY modifier should not be used when submitting:
Commercial claims
Federal Employee Program claims
In-patient institutional claims. Please use the appropriate condition code to denote statutorily excluded services
As of April 1, 2016, Medica is allowing the GY modifier only on claims that have status X codes (“Statutorily non-covered”). When providers submit Medicare claims, they should not append the GY modifier when using status N codes or Medicare non-covered codes. Medica may cover some status N codes as enhanced benefits with Medicare plans such as Medica Prime Solution®. The GY modifier is not appropriate with N codes or Medicare non-covered codes, so claims reflecting this use will be denied as provider liability with denial reason code 092 (“Incorrect modifier”).
Action
For claims denied due to incorrect use of the GY modifier, providers will need to correct the claims and resubmit them with an appropriate modifier so that Medica can process the claims.
How do I know if a service is statutorily excluded or not covered by Medicare?
Providers are responsible for including the GY modifier on only those services which are statutorily excluded by Medicare.
Where on the claim do I put the Modifier?
The GY modifier should be used with the specific, appropriate HCPCS code when one is available. In cases where there is no specific procedure code to describe services, a “not otherwise classified code” (NOC) must be used with the GY modifier.
The GY modifier is located in the line level procedure code modifier field(s) and the modifier can be:
• Present position 1, 2, 3 or 4.
• On the paper 1500 form, the GY modifier can be found in field 24D.
• On the paper UB04 form, the modifier can be found in field 44.
• On the 837P the modifier is found at level 2400, Service Line Loop in SV101-3, SV101- 4, SV101-5 or SV101-6.
• On the 837I the GY modifier is found at level 2400, Service Line Loop in SV202-3, SV202- 4, SV202-5 or SV202-6
Item or Service Statutorily Excluded or Does Not Meet the Definition of Any Medicare Benefit
Non-covered by Medicare Statute (ex., service not part of recognized Medicare benefit)
Optional notice only, unless required by COPs; beneficiary liable
Use on all types of line items on provider claims. May be used in association with modifier –GX.
Lines submitted as non-covered and will be denied
GY and GX Modifiers
Beginning in January 2002, Medicare allowed providers and suppliers to use the GY modifier to indicate that a service or item is not covered by Medicare, either because it is statutorily excluded (e.g., hearing aids) or does not meet the definition of any Medicare benefit (e.g., surgical dressings that are used to clean or protect intact skin).
Because Medicare does not cover these services or items, the beneficiary is liable for payment. No ABN is required with the GY modifier. The provider or supplier may use this modifier when a beneficiary needs Medicare to deny the claim so that it can be submitted to the beneficiary’s secondary insurance.
In April 2010, Medicare established the GX modifier. It indicates that a service or item is statutorily excluded and that the provider or supplier voluntarily gave the beneficiary an ABN.10 In 2010, Medicare provided instructions to contractors to automatically deny Part A claims with the GX modifier for noncovered charges.
11 Medicare has not issued similar instructions for Part B claims. Table 2 provides the definitions of GY and GX modifiers.
Medicare Part B Claims Processing
CMS contracts with Medicare Administrative Contractors (MAC) to process and pay part B claims.12 These contractors also apply claims processing “edits”—i.e., system checks—to prevent improper payments; conduct medical reviews and data analyses of claims; and conduct outreach and education to providers. Edits flag a claim for automatic denial or for contractor review to ensure that the claim is appropriate.
CMS provides contractors with various instructions about how to process claims with G modifiers. CMS required contractors to automatically deny claims with GZ modifiers for services or items that were provided on or after July 1, 2011.
13 Currently, CMS does not have any specific instructions for claims with GA modifiers, except for those submitted with both a GA and GZ modifier; CMS instructs contractors to treat such claims as unprocessable.14 For claims with GY modifiers, CMS allows contractors to deny these claims at their discretion. Finally, CMS has not issued instructions forprocessing Part B claims with GX modifiers .
Modifier -GZ
Item or Service Expected to Be Denied as Not Reasonable and Necessary
May be non-covered by Medicare
Cannot be used when ABN or HHABN is actually given, recommend documenting records; provider liable
Available for optional use on demand bills NOT related to an ABN by providers who want to acknowledge they didn’t provided an ABN for a specific line Lines submitted as non-covered and will be denied.
The GA modifier is submitted on claims when the supplier has an Advance Beneficiary Notice on file.
An ABN is a written notice a supplier gives to a Medicare beneficiary before items or services are furnished when the supplier believes that Medicare will not pay because there is a lack of medical necessity.
Keep in mind that not all items submitted with the GA modifier are denied as patient responsibility. Items must be denied based on medical necessity in order to receive a patient responsibility denial.
The GZ modifier is used to indicate suppliers expect Medicare will deny an item or service as not reasonable and necessary and they do not have an ABN on file.
The GY modifier is submitted when suppliers indicate an item or service is statutorily non-covered or is not a Medicare benefit.
Examples of items to use the GY modifier with are infusion drugs that are not administered through a durable infusion pump, personal comfort items and enteral nutrients administered orally. Also, many of the LCDs provide instructions on when to use the GY modifier.
RESULTS
In 2011, Medicare paid nearly $744 million for Part B claims that providers expected to be denied as not reasonable and necessary or as not being covered by Medicare .
Medicare paid for 16.5 million Part B claims with GA, GZ, GX, and GY modifiers. Most of these claims (98 percent) were submitted with GA modifiers. Another 2 percent of claims were submitted with GZ modifiers. Less than 1 percent of claims were submitted with GY and GX modifiers.
Contractors also do not always consider modifiers that providers use to indicate that services or items are not covered by Medicare
Providers use GY modifiers to indicate that either a service or item is statutorily excluded (e.g., eyeglasses) or that it does not meet the definition of any Medicare benefit (e.g., surgical dressings that are used to clean or protect intact skin rather than to cover an actual wound). Medicare gives contractors the discretion to automatically deny claims with GY modifiers. Eleven of the thirteen contractors we interviewed automatically denied these claims, while two contractors did not. One of these contractors reported that, instead of automatic denial, it had an edit in place that flags these claims for review. The other contractor reported that it had other edits that affect some claims with GY modifiers, such as edits to check that services and items met Medicare coverage requirements.
In 2011, Medicare paid for less than 1 percent of claims with GY modifiers, totaling $1 million. As shown in Table 4, the majority of paid claims with GY modifiers (87 percent) were for DMEPOS. Most of these claims were for accessories for prosthetics and orthotic devices. The next most common claims with GY modifiers were for enteral and parenteral nutrition; ambulance services; and drugs, such as vitamin B12 injections.
Further, Medicare paid $4.1 million for Part B claims that included inappropriate combinations of G modifiers from 2002 to 2011 With the exception of a GX modifier paired with a GY modifier, all other combinations of G modifiers on the same claim are inappropriate. From 2002 to 2011, Medicare paid $4.1 million for claims submitted with inappropriate G modifier combinations. Claims that contained both a GA and GY modifier made up the vast majority of these claims, totaling $3.9 million in payments. Claims with this combination indicate that the provider expects that the service or item is not reasonable and necessary and that it is not covered by Medicare.
Medicare paid $89,973 for claims with the combination of a GA and GZ modifier. Including both modifiers is contradictory and indicates that the provider expects that claim to be denied as not reasonable and necessary and either provided an ABN (GA) or did not provide an ABN (GZ). Because contractors must automatically deny claims that include both GA and GZ modifiers, it is unclear why Medicare paid for these claims.
CONCLUSION
This memorandum report describes Medicare payments for Part B claims with G modifiers and how contractors use these modifiers in their claims processing. In 2011, Medicare paid nearly $744 million for Part B claims with G modifiers. We found that vulnerabilities exist in how Medicare pays for these claims. When processing claims, contractors often do not consider the modifiers that providers use to indicate that they expect the services or items to be denied as not reasonable and necessary.
Contractors also do not always consider the modifiers that providers use to indicate that services or items are not covered by Medicare. Although contractors have checks that affect some of these claims, such as determining whether the services and items met Medicare frequency limitations, they do not specifically check for claims providers expect not to be paid. Further, we found that Medicare paid $4.1 million for claims that included inappropriate combinations of G modifiers from 2002 to 2011.
CMS needs to address the vulnerabilities presented in this report. We are aware that CMS developed a GU modifier for providers to use on claims for items and services for which the routine use of ABNs is appropriate, such as for services that are subject to frequency limitations. This is one way to address the problem in that it would allow providers to use the GA modifier solely for other items and services that they expect to be denied. CMS would then need to instruct contractors to automatically deny or review claims with GA modifiers before paying them. To date, however, CMS has not issued any instructions about the GU modifier or how contractors should process these claims.
CMS needs to either issue such instructions or develop other methods of addressing these program vulnerabilities.
In addition, CMS needs to ensure that all contractors are following its instructions to automatically deny claims with GZ modifiers. CMS also needs to instruct contractors to automatically deny claims with GY modifiers and ensure that contractors follow these instructions. Further, CMS should decide whether to implement the GX modifier for Part B claims, since providers are already using it. Lastly, CMS should ensure that contractors do not pay for claims with inappropriate combinations of G modifiers. OIG will continue to monitor claims with G modifiers and will undertake a review in the future if it appears that CMS has not addressed the problems presented in this report.
1. Definitions of the GA, GY, and GZ Modifiers
The modifiers are defined below:
GA – Waiver of liability statement on file.
GY – Item or service statutorily excluded or does not meet the definition of any Medicare benefit.
GZ – Item or service expected to be denied as not reasonable and necessary.
2. Use of the GA, GY, and GZ Modifiers for Services Billed to Local Carriers
The GY modifier must be used when physicians, practitioners, or suppliers want to indicate that the item or service is statutorily non-covered or is not a Medicare benefit.
The GZ modifier must be used when physicians, practitioners, or suppliers want to indicate that they expect that Medicare will deny an item or service as not reasonable and necessary and they have not had an Advance Beneficiary Notification (ABN) signed by the beneficiary.
The GA modifier must be used when physicians, practitioners, or suppliers want to indicate that they expect that Medicare will deny a service as not reasonable and necessary and they do have on file an ABN signed by the beneficiary. (See http://www.cms.hhs.gov/medlearn/refabn.asp for additional information on use of the GA modifier and ABNs.)
The GY and GZ modifiers should be used with the specific, appropriate HCPCS code when one is available. In cases where there is no specific procedure code to describe services, a “not otherwise classified code” (NOC) must be used with either the GY or GZ modifier.
3. Use of the GA, GY, and GZ Modifiers for Items and Supplies Billed to DMERCs
The GY modifier must be used when suppliers want to indicate that the item or supply is statutorily noncovered or is not a Medicare benefit.
The GZ modifier must be used when suppliers want to indicate that they expect that Medicare will deny an item or supply as not reasonable and necessary and they have not had an Advance Beneficiary Notification (ABN) signed by the beneficiary.
The GA modifier must be used when suppliers want to indicate that they expect that Medicare will deny an item or supply as not reasonable and necessary and they do have on file an ABN signed by the beneficiary.
The GY and GZ modifiers should be used with the specific, appropriate HCPCS code when one is available. In cases where there is no specific procedure code to describe items or supplies, an NOC must be used with either the GY or GZ modifiers.
4. Use of the A9270
Effective January 1, 2002, the CPT A9270, Noncovered item or service, under no circumstances will be accepted for services or items billed to local carriers. However, in cases where there is no specific procedure code for an item or supply and no appropriate NOC code available, the A9270 must continue to be used by suppliers to bill DMERCs for statutorily non-covered items and items that do not meet the definition of a Medicare benefit.
5. Claims Processing Instructions
At carrier and DMERC discretion, claims submitted using the GY modifier may be auto-denied. If the GZ and GA modifiers are submitted for the same item or service, treat the item or service as having an invalid modifier and therefore unprocessable.
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